Fuel cost hits three-year high in November as global oil prices creep up

The price of both petrol and diesel rose by more than 2p a litre across the UK last month, taking the average cost of both fuels to their most expensive level in three years, according to the RAC.

Figures released by the group on Tuesday show that the price of a litre of unleaded fuel rose from 118.43p to 120.78p, and diesel from 120.96p to 123.18p, during the course of the month, largely as a result of the global price of oil being above the $60 per barrel mark during the whole of November.

The RAC said that the cost of filling a 55-litre family car with petrol is now £66.43 – or £3.55 more than it was in July, when unleaded was at its cheapest point for this year, of just 114.33p.

The cost of filling up a tank of diesel now stands at £67.75 – which is £4.50 more than it was in July when diesel was at its 2017 low point of 115.02p.

But the cost of both fuels would be higher if the pound had not risen against the dollar in recent weeks. Because oil is priced in dollars, a stronger pound means that those buying in the UK can get more for their money.

The pound appreciated by around 2 per cent against the US currency during the course of November.

RAC fuel spokesman Simon Williams said that the recent resilience of the UK currency “is good news for motorists as it means petrol and diesel prices are unlikely to shoot up”.

He said that we may even see them come down “very slightly” over the next week.

At the end of November, the international Organisation of the Petroleum Exporting Countries (Opec) met in Vienna to discuss the level of oil production among its 14 member nations.

The group of countries, along with some non-members, has been restricting production in a bid to prop up prices after the cost of a barrel of oil slumped below $30 a barrel in January 2016.

At Opec’s November meeting, members agreed to extend production caps into next year, but Mr Williams said that petrol prices in the UK next year will hinge on how effective Opec’s measures prove to be.

“The increased barrel price [the cuts are] designed to create may also work against the group as it makes fracking for oil in the US more financially viable, which in turn may lead to America increasing its production and filling the gap from the cuts. If this happens it should mean forecourt prices won’t go shooting up,” he said.